Hedge fund company D E. Shaw invests in Bitcoin mining company Riot Platforms

The telecommunications industry stands at a critical juncture. As global data consumption skyrockets, traditional telecom operators face a perfect storm of challenges: stagnant subscriber growth, costly infrastructure maintenance and an insatiable demand for bandwidth. This capacity crunch is not just a problem for carriers; it's a looming crisis for consumers who increasingly rely on seamless connectivity in their daily lives.In 2024, AT&T projected $4.7 billion in site lease costs. Add in Verizon and T-Mobile, and the annual cost of leases for wireless coverage in the US approaches a staggering $15 billion. As infrastructure costs rise, margins on internet access are projected to rise more slowly for telecom companies. Meanwhile, demand continues to explode, with global data consumption over telecom networks projected to grow by almost 2x by 2027.The industry's attempts to find new revenue streams, such as through fixed wireless access, which is used to connect home internet users via cellular connections, will exacerbate the problem by placing additional strain on cellular capacity. As a result, consumers face the prospect of degraded service and rising costs.Enter the decentralized physical infrastructure network (DePIN) — a solution that promises to address the capacity dilemma head-on. In a decentralized model, infrastructure is owned, deployed and maintained by multiple parties rather than by a central authority like a big telco operator. In return for sharing in the cost and work of deploying new network capacity, infrastructure owners are rewarded with blockchain incentives.By leveraging distributed resources and blockchain technology, carriers can see:For many telecom executives, embracing decentralization represents a significant cultural shift. But they’d be wise to consider history as they look to the future of their industry. For example, when the initial switch from analog to digital networks began in the 1990s, consumers and industry executives were hesitant to upgrade their systems. But once implemented, 2G cellular technology improved capacity and efficiency, and also enhanced voice quality, SMS messaging and data services that would lay the foundation for subsequent generations of mobile services.Concerns about quality of service, control and security no longer need to deter a transition to a decentralized network. Each of these issues can be satisfactorily addressed through standards-based implementations and robust governance models to achieve the long-term benefits of adopting decentralized models, as well as set the stage for future innovation and improvements. By collaborating with DePINs, telecoms can position themselves at the forefront of a new era in connectivity.One of the most promising entry points for DePIN is via coverage creation and carrier offload. Decentralized telecom networks can create coverage where it didn’t exist before. Currently, carriers identify regions where connectivity is needed, and business development teams engage with local real estate owners to lease and develop sites for expanded coverage. It’s a time- and resource-intensive process with considerable costs attached.DePINs, however, can deliver a new "point-and-shoot" model where carriers indicate directly to the decentralized builder community where coverage is needed. Carriers can use tools such as the Helium Planner to mobilize communities to create coverage where they know it will be used, benefitting both the builders and the mobile customers, and instantly enhancing the operator’s network.Helium stands as a prime example of a decentralized telecom network that is successfully being used by traditional carriers. The network already collaborates with several telcos, both in the US and Mexico, the latter via its partnership with Telefónica — a testament to the growing acceptance of decentralized solutions by major industry players.By incentivizing individuals and businesses to operate Hotspots, over 400,000 subscribers of U.S. telco carriers connect to the Helium Network daily to access the internet through Hotspots. With over 500 terabytes of data transfers into Helium, the Network has proven that traditional telcos can embrace the capacity, security and effectiveness of decentralized networks.Decentralized network expansion will become even more critical as 6G rolls out nationwide in the coming years. As stated in the recently released 6G Vision Statement from the Wireless Broadband Alliance (WBA), we will need more robust and intentional collaboration across the industry to “achieve ubiquitous connectivity” to overcome costly cellular infrastructure upgrades. The industry needs cost-effective offloading solutions to roll out this next generation of wireless technology efficiently. As the telecom industry grapples with unprecedented challenges, decentralized networks offer a path forward. By leveraging blockchain technology, embracing innovative partnerships and reimagining the very nature of connectivity, telecom leaders will be able to thrive in the coming decades.

In today’s issue, Miguel Kudry from L1 Advisors breaks down direct ownership of cryptocurrency vs. exchange-traded and wrapped funds and how they are expected to evolve through 2025.Then, Crews Enochs from Index Coop answers questions on the topic in Ask and Expert.Sarah MortonCrypto for AdvisorsSubscribe hereThe year 2024 marked a pivotal moment for the cryptocurrency market with the launch of bitcoin and ether spot exchange-traded funds (ETFs), rapidly becoming some of the fastest-growing ETFs in history. According to various reports, global crypto ETPs amassed over $134 billion in assets under management (AUM) by November 2024. This success was notable even under the initial constraint of cash-only redemptions and contributions in the United States, a condition imposed by the SEC during the 2024 approvals. However, the landscape is set to evolve further in 2025 with anticipated changes in redemption mechanisms.The SEC's decision in 2024 to not allow in-kind redemptions and contributions meant that only cash could be used for buying or selling ETF shares, which somewhat limited the potential of these financial products. This restriction is poised to change in 2025, with expectations that regulatory bodies will permit in-kind transactions for spot crypto ETFs. BlackRock has already filed for a rule change to enable in-kind redemptions for its Bitcoin ETF. This change will allow authorized participants to issue and redeem shares directly with Bitcoin or ether rather than cash, which will create a new liquidity flywheel between traditional finance (TradFi) and decentralized finance (DeFi) ecosystems.The cash-only approach previously left billions in cryptocurrency assets on the sidelines. Crypto-native investors, particularly those with low-basis assets, hesitated to convert their holdings into ETFs due to the substantial tax liabilities. With in-kind redemptions, these investors could move portions of their crypto wealth into ETFs without the immediate tax burden, thus accessing a broader range of traditional financial services like uncollateralized lending, mortgages, and private banking.For traditional investors who have gained exposure to cryptocurrencies through ETFs, the shift to in-kind redemptions provides an opportunity to dive deeper into the crypto ecosystem. These investors, having seen significant appreciation in their ETF holdings (bitcoin, for instance, was valued at around $46,800 at the time of ETF launch in January 2024, and ether at approximately $3,422 by mid-July 2024), can now convert their ETF shares into direct crypto holdings to explore DeFi products without needing new capital or facing tax implications.The recent withdrawal of Staff Accounting Bulletin No. 21 (SAB-21) is another significant development. This will relieve financial institutions from recording digital assets as liabilities on their balance sheets, encouraging more banks and brokerages to engage with crypto custody and develop crypto-native financial products. An example of this trend is Coinbase's recent launch of a bitcoin-backed lending product in partnership with Morpho Labs, leveraging DeFi to back loans with Bitcoin. This year, we should expect to see a wave of traditional financial institutions following this path.Concurrently, a segment of investors gravitate towards self-custody, preferring to manage their assets independently to access crypto-native products without intermediaries. This trend underscores the importance of user-friendly and secure self-custody solutions in the evolving crypto landscape.2025 is shaping up to be when the boundaries between traditional and decentralized finance become increasingly blurred. With mechanisms like in-kind transactions and favorable regulatory changes, investors will likely interact with crypto-native platforms more seamlessly, often inadvertently. This convergence is expected to enhance inflows into both sectors, boosting volume and creating a more interconnected and liquid market.In conclusion, the evolution from ETF to direct ownership in the crypto space is not just about investment choice but about how these financial instruments are reshaping investor behavior and market dynamics. With in-kind redemptions on the horizon and regulatory changes like the withdrawal of SAB-21, 2025 will mark a significant chapter in integrating cryptocurrencies into mainstream finance, further blurring the lines between traditional and on-chain financial rails.Miguel Kudry, CEO, L1 Advisors24/7 market access is just the starting point. On-chain ownership unlocks true composability—allowing investors to use assets as collateral, earn yield, and participate in decentralized ecosystems. While ETFs provide exposure, on-chain assets provide unmatched flexibility and utility.Have you ever tried transferring holdings from one brokerage to another? How long did it take? Was it a nightmare of friction? Probably. With on-chain crypto ownership, you have complete control. You can self-custody your assets, deposit them with custodians, and move them in and out in minutes. What if an opportunity arises, and you need to act fast? You can get liquidity immediately by selling or borrowing against your assets—no waiting, no hassle, just action when needed.Imagine an AI agent managing investments. To buy an ETF, it would need to navigate KYC processes, work through a brokerage’s limited hours, and depend on human intermediaries. Tokenized assets on-chain eliminate these barriers, offering 24/7 access, seamless automation, and the composability to maximize efficiency. For AI-driven financial systems, the choice will be clear: DeFi.Crews Enochs, ecosystem growth lead, Index Coopcrypto orderArizona Bitcoin Strategic Reserve BillSubcommittee on Digital Assets

The current total position of OKX BTC option contract is 29462.74 BTC, with a 5.38% increase over the past 24 hours, indicating an increase in activity in the options trading market. Data for reference only Interpretation: Option holding refers to the total number of unexercised option contracts in the market, which can reflect the current market's views and expectations on the future price trend of a certain underlying asset. Data for reference only

According to Cointelegraph, Tether is concerned about the delisting of the USDT exchange caused by EU MiCA regulations. (Crypto.com) has confirmed that it will begin delisting USDT and nine other tokens from European platforms on January 31st, following Coinbase's removal of USDT in December 2024 on compliance grounds. Tether criticized this move as hasty and lacking clear evidence, and warned that a sudden delisting could increase market instability and affect European cryptocurrency users. MiCA requires non compliant stablecoins to be fully restricted by the end of the first quarter of 2025, but exchanges may offer limited selling options before March 31st. In addition, Tether announced the relocation of its headquarters to El Salvador to support the country's Bitcoin policy and decentralized financial development.

According to official sources, Injective has launched the AI index perpetual market (AIX) on its decentralized exchange Helix, which integrates traditional stocks and cryptocurrency assets into a single on chain asset. The AIX index includes 10 selected AI tokens and 6 AI stocks, with investment targets covering traditional technology stocks such as NVIDIA (NVDA) and TSM, as well as blockchain projects in AI tracks such as Bittensor (TAO) and Injective (inj).

Hedge fund company D E. Shaw invests in Bitcoin mining company Riot Platforms

24/7 Flashes

Telecom’s Future Lies in Decentralized Networks

Crypto for Advisors: Crypto Ownership vs. ETF

The total holdings of OKX options have increased by 5.38% in the past 24 hours, and the activity of the options trading market has increased

Tether responds to EU regulation, exchange plans to delist USDT

Injective launches AI index product AIX, integrating on chain stocks and cryptocurrencies

24/7 Flashes

Telecom’s Future Lies in Decentralized Networks

Crypto for Advisors: Crypto Ownership vs. ETF

The total holdings of OKX options have increased by 5.38% in the past 24 hours, and the activity of the options trading market has increased

Tether responds to EU regulation, exchange plans to delist USDT

Injective launches AI index product AIX, integrating on chain stocks and cryptocurrencies